Sources told the [Iraq survey] group that Saddam and his son Uday had each, on separate occasions in 2001 and 2002, asked officials associated with Iraq's chemical-warfare program how long it would take to produce chemical agents and weapons. One official reportedly told Saddam that it would take six months to produce mustard gas (among the easiest such agents to manufacture); another told Uday that it would take two months to produce mustard gas and two years to produce sarin (a simple nerve agent). The questions do not suggest the presence of large stockpiles. The answers do not support a just-in-time capability.

So, guess what. When Saddam told the UN that he didn't have any weapons capability, as he did, repeatedly and unambiguously, he was not only telling the truth, but he knew he was telling the truth.

Thursday, January 29, 2004

A little news this morning on the seriousness of neoconservatives regarding threat assessment and the War on Terror.

First off, these guys take seriously the notion that the US has some kind of right to move against potential threats. So, for instance, we had to move against Iraq because some folks in the administration had a vague feeling that Saddam Hussein might have something nasty up his sleeve, which was unsubstantiated by any hard evidence. Now, their man, David Kay, who they brought in after the war to try to find some evidence of the threat they were talking about, says there wasn't any. And so they're resisting his call for an investigation into prewar intelligence. If that's allowed to go forward, then someone might object the next time Dubya declares some random country to be a dire threat for no reason -- and that would endanger the Republic.

Wednesday, January 28, 2004

Employment is lagging not because businesses are too bureaucratic and slow to hire quickly, but because demand growth has been slower than productivity growth. Policies that had produced faster demand growth--either by not scaring the bejeezus out of everyone by claiming that Saddam Hussein was an immediate and deadly threat to every American, or by a fiscal policy that had more employment bang--would have produced faster employment growth as well.

But businessmen who are actually in a position to create good jobs say instead that they aren't doing it here because, no matter what the job, you can find someone who will do it just as well for less in India or China.

Who to believe about the motives of the businessmen -- the businessmen themselves or the economists?

Which is not, for the umpteenth time to argue that trade or outsourcing per se is bad, but rather, that at the very least, we are handling it badly...

So,when Diana Moon was canvassing in New Hampshire for Dean, he was the frontrunner. When she switched to Kerry, this lead to a comeback in the polls which left many observers baffled. Now, if she could only use this power to get herself into a decent apartment.

She's also castigating a lot of liberal bloggers for giving Al Sharpton a "free pass", including those like myself who think that the proper way to deal with buffoons like Sharpton is to give them the attention they deserve, which is to say, none. In which case, I can only point out that I have also, to the best of my recollection, been giving a free pass to the Anti-Idiotarian Rottweiler, the director of Boston's Museum of Fine Arts, the corrupt officials of the Massachusetts Turnpike Authority, child slavery in the chocolate groves of the Ivory Coast, the slam-dancing drunks who tackle fans of the other bands at World Inferno gigs, and that annoying guy in the Dodge SUV ads who's obsessed with the damn thing's overpowered engine, among others...

Tuesday, January 27, 2004

So, do you still think outsourcing has nothing to do with poor job
creation in the US, during the current "recovery"? Well, listen to
Craig Barrett, CEO of Intel:

Intel has its headquarters in Silicon Valley. A Mercury
News interviewer asked Mr. Barrett what the Valley will look like in
three years. Mr. Barrett said the prospects for job growth were not
good. "Companies can still form in Silicon Valley and be competitive
around the world," he said. "It's just that they are not going to
create jobs in Silicon Valley."

He was then asked, "Aren't we talking about an entire generation of
lowered expectations in the United States for what an individual
entering the job market will be facing?"

"It's tough to come to another conclusion than that," said
Mr. Barrett. "If you see this increased competition for jobs, the
immediate response to competition is lower prices and that's lower
wage rates."

Once again, the point here is not that trade, per se, is bad; it's
that we, as a society, are dealing with it very badly. Though there
are other puzzling things in the mix. By most accounts I've read or
heard, for instance, while programmers in Bangalore get paid a whole
lot less in raw dollars, their lifestyles are more comparable than
you'd think to what Americans enjoy -- they have cable TV, DVDs, cars,
and the usual toys. So, if you expect the dollar to slide towards
purchasing power parity, then that may take care of the wage
differential, in the long run -- at the price of serious dislocation
elsewhere, of course, as in the poorer
prospects for say, science fiction writers overseas selling into
the US market:

I was deeply unamused to notice the US dollar continuing its slide... you can now buy 1.8025 dollars with a single pound sterling.... [T]he dollar was at 1.50 to the pound for almost the whole of the 1990's.... [T]he majority of my sales... are to publishers in the United States.... If the dollar loses 15% of its value against the pound between a contract being negotiated and the books written, delivered and paid for, then the author loses 15% of his or her pay packet....

[I]f you're a British SF/fantasy writer, then almost by default (if you want to earn a living) you're a one-person export industry aimed at the North American market. Which is why headlines like this one (No end in sight to dollar's descent) do not fill me with joy and goodwill towards all Federal Reserve bankers.

To which Brad DeLong replies:

Within the decade, I predict, Charlie will find it
possible to (with only small transactions costs) to take huge honking
short derivative positions against the dollar, positions backed and
collateralized by claims on his future royalty earnings. Then he will
view declines in the dollar with equanimity rather than terror, as the
losses on his expected royalty earnings are offset and neutralized by
the gains on his derivative portfolio.

Brad might enjoy that prospect -- that's why he's an economist.
Charlie, as he makes clear in the comments on this entry, is not. And
it says something about the blind spots of academic economists that
they think that constructing and evaluating massively leveraged
derivative portfolios is the kind of thing that other people will, at
some point, be good at, or even want to do. The transaction cost that
Brad doesn't figure in, for Charlie, is Charlie's own time, which
would be considerable no matter how cheap the formal brokerage
arrangements turn out to be. Which means he's not a homo
economicus, the oft-modeled species never seen in nature
which will spend enormous amounts of time integrating all sorts
of information into complex models of future price movements in
return for trivial gains in some ill-defined utility function...

Monday, January 26, 2004

An austere home in a dusty alleyway here has become a
center of power rivaling the American occupation headquarters in
Baghdad -- and the scene of fierce inner struggles for one man's ear.

They are referring to the austere home of the Grand Ayatollah Ali
Sistani. And they're a bit late covering the story -- people who have
been reading Juan Cole's blog have
known of the Ayatollah Sistani, the most prominent "Object of
Emulation" for Iraq's Shiites, as a critical figure in the governance
of Iraq for months. But because he has wanted to deal with the CPA by
quiet negotiation and, where possible, accomodation (at least until
the recent mass demonstrations which appeared and then vanished at his
word), there has (up till those demonstrations) been no concrete
demonstration that he has actual power -- and so the American press,
in ignoring him, seems to have been simply pretending that he doesn't.
And, to some extent, they still are -- this story
in today's paper seems to imply that Sistani's demands for
elections (which he's been making for months) only became an issue
when he gained adherents on the IGC. One hopes that the CPA itself
hasn't been making the same mistake.

But it seems, at long last, as if the CPA, or at least some
factions within it, want to be a little flexible. Indeed, in
discussions with the UN, US representatives have said only one thing is
nonnegotiable -- we must be out by June 30th. And so Dubya's crew
continues to show the same rock-ribbed devotion to principle and
judicious sense of priorities which have marked all their dealings in
Iraq, and in fact their conduct of
the whole "war on terror"...